Since early 2008 businesses have been in a battle to keep the consumer spending. The easiest way to do this is lower the price of goods. As I walked around the shopping mall I could see a constant sea of redness in the windows indicating a sale. This created an expectation in the consumers mind that made them reluctant to pay full price.
This was especially true for the brand ‘Gap’ who were catering for the 18-26 market; a demographic who are low on money and eager for a bargain, causing Gap to be in a position of having an ever-sale.
One company that did not lower their prices was Abercrombie & Fitch (AF). The casual luxury clothing brand, aimed at the college age individual explained that they would not compromise on the pricing of their premium items.
This is a brave move when you see other brands slashing their prices but it is also smart and it has paid off as AF came through the downturn when many perished and also experienced a profit.
Abercrombie & Fitch have been criticized recently over CEO Mike Jeffries laser focus on a specific target audience. Despite this AF does provide some lessons for the business owner that you can apply and prosper.
Have a specific audience
If you ever see AF branding or their other brands Hollister & Gilly Hicks you will notice 2 things; they are young and they are beautiful. It is not just the advertising either. When I go into their stores it is hard not to notice how beautiful the staff are. AF target a specific audience; the young and the beautiful. The CEO Mike Jeffries once said in an interview they unashamedly target the jocks, if you are over weight and a bit nerdy, AF is not for you.
From a marketing perspective this is not a bad thing, they have drilled down what market they are vying for and they aim everything towards talking their language. Compare this with a graphic designer I am currently working with on his business. Upon asking him what market he is targeting, he replied “I’m pretty much happy to work for anyone from a plumper looking for a logo to a bigger firm in need of brand strategy”.
This is like AF saying they make clothes for anyone from the fat kid with acne to the pensioner with hip issues.
When you look at what you want for your creative business ask yourself:
– Who would I like to work with?
– What is their story? (A story helps you drill down specifics)
They Aim for Elite
AF are elitist. There is no denying that. Rumour has it that when they advertise for staff they don’t call it recruiting, they call it ‘auditioning’. However, as a result of being elitist they refused to compromise on price and so primed their audience to not expect a reduction in price.
When I look at the graphic design business my client is creating he is up against people who will sell their services to create a logo for $5 on Fiverr. Unless he wants to spend his days resembling a factory conveyor belt, he has to set his standards high, and so do you.
This requires a level of confidence in believing in the value of what you have to offer but doing so means having a pricing model that works for the people you want to work with.
They create an experience
There is no mistake that you have been in a AF branded store. With the intent to feel like you are in a Californian beach hut, you are greeted by a ridiculously attractive assistant, walk around in very dimly lit lighting to the extent its easy to get lost and you can’t help but notice a light scent of perfume floating in the air.
Whilst some describe it as pretentious you can’t deny they are providing an experience that is different to what you get in other stores. People remember experiences, that’s why they are happy to jump out of planes or ride fast roller coasters; to have an experience!
With your business, you can create an experience for the client that is different to what they have experienced before. From the way you elicit what they really want to how you communicate to them throughout the process and by creating a pleasant experience for them they are more likely to come back.
Abercrombie & Fitch are doing well in areas by not following the crowd and doing what others are doing. When you look at your business find out what you want to make special about it and then begin the process of creating that.
What do you think? Do you think Abercrombie & Fitch have gone too far or have they just super refined their audience?